What Is Annualized Witholding Tax (Alphalist)?

The Alphalist Report involves the adjustment of tax withheld to align it with the actual tax owed on an employee’s income throughout the fiscal year. This process is carried out by companies to guarantee that both employees and the company fulfill their tax obligations accurately to the Bureau of Internal Revenue (BIR).

This report also contains information on taxes deducted by employers from their employees’ wages. It also includes the computations for tax refund and tax payable at the end of the year.

  • Tax Payable: If total tax due > total tax collected for the year
  • Tax Refund: If total tax due < total tax collected for the year
  • Break even: If total tax due = total tax collected for the year

Important dates to remember:

By 31 January, employers must provide their employees with a copy of the BIR- 2316 form.

On or before 28 February, the BIR-2316 form must be signed by all employees and the employer. The form and any other details must then be submitted to the Bureau of Internal Revenue (BIR).

What is the BIR-2316 Form?

The BIR-2316 form, commonly referred to as the Certificate of Compensation Payment/Tax Withheld, serves as an official record detailing an employee’s gross income and the corresponding tax withheld by the employer over the fiscal year. It is mandatory for all companies that employed individuals in the preceding year to submit the 2316 form to the Bureau of Internal Revenue (BIR). This form plays a crucial role in enabling the BIR to oversee the company’s adherence to tax regulations.

Why am I receiving large deductions/refunds during the year-end?

Tax deductions are generally determined by calculating the gross taxable salary using the BIR’s tax table. It’s important to note that different tax tables are applicable based on the pay cycle adopted by a company. Additionally, during the tax annualization period, the annual tax table serves as another reference guide.

While both methods will result in identical tax calculations, various factors below may impact these computations:

  • An Employee hired in the middle of the year
  • Adjustments made in the middle of the year
  • Frequent absences or prolonged leaves
  • Salary deductions

Hence, adjustments can be anticipated when taking these factors into account. Typically, a refund is applicable under the following circumstances:

• Fails to meet the PHP 250,000.00 cap
• Receives a significant amount of taxable income in the middle of the year
• Is a newly hired employee joining in the middle of the year

On the other hand, additional deductions are probable in the following situations:

• The employee’s taxable income bracket changes for the year
• The employee has a previous employer and submits the 2316 form to the new employer for consolidation.

How to compute Annualized Withholding Tax?

Before computing the annualized tax, employers must:

• Maintain comprehensive records of employees’ earnings throughout the year to ensure accurate calculations.
• Identify taxable and non-taxable income.
• Understand the calculation process for gross taxable income.

Once the annual gross taxable income is computed, refer to the annual tax table below:

Example: If the gross taxable income tax for the entire year is PHP 545,000, the tax due will be PHP 51,500.

(As 545,000 falls within the range of 400,000 to 800,000, we will refer to the third row in the Annual Tax Table.)

Annual Tax Due:

= 545,000 – 400,000
= 145,000 x 20%
= 29,000 + 22,500
= 51,500

Lastly, deduct the Annual Tax Due from the total Tax Withheld throughout the year. This will determine whether a refund or remaining is due.

Performing tax annualization is crucial for ensuring the accuracy of your employees’ payroll, as mandated by the Bureau of Internal Revenue (BIR). Additionally, given that employers in the Philippines as Withholding Agents, it is essential to guarantee full compliance with tax laws and labor regulations within your company.

Please see details on : How to Generate the BIR Alphalist on PayrollHero? or feel free to get in touch with us by signing up here – https://signup.payrollhero.com/sign_up/business_info

Is Your HR Team Prepared for 2017?

If you are planning on making changes to your HR and payroll tools then now is the time. Many companies still use Excel, paper and pen, or outdated software to complete their payroll each and every period.

Starting the calendar year fresh on a new platform that helps to automate your monthly reports, year end compliance and provides easy to use analytics is the way to go.

Here is how PayrollHero can help your business for 2017;

Singapore Companies ??

Philippine Companies ??

PayrollHero’s powered time, attendance, scheduling, HRIS, leave management and payroll platform is essential for todays growing business. Contact us to learn more.


Year End Update – Philippines: Alphalist, BIR DAT Files and 2316 Forms

This is one of PayrollHero’s biggest releases this year. You can view the original post here:

In a nutshell:

  • Updated 2015 Alphalist
  • Alphalist DAT Files
  • Updated Multi-Inserts for Previous Employer and Additional Dependents
  • BIR 2316 Forms (New)

What’s new this release?

  • For 2015, the BIR Exemption amount has been increased to Php 82,000.00 of the total amount of exclusion from gross income for 13th month pay and other benefits. This change was effective from Jan 1, 2015.
  • You can now download DAT Files. These files are the upload-version of BIR’s Alphalist.

  • You can now add previous employer details so you can generate accurate 7.1 and 7.5 Alphalists. This can be added through the Previous Employer Multi-insert form.

  • You can now add additional dependent information to be used in your 2316 forms. Additional dependent information can be added through the BIR Update Multi-insert Tool.

  • 2316 forms can now be downloaded individually through the employee profile.

Where can I download these forms?

You can download the Alphalist and the DAT files by going to “Payrolls > Reports > Forms (click view)”. You can allow the employee access or download their 2316 form by going to their “Employee Profile > Documents > BIR 2316”.

What do I need to do?

Accounts that have complete payrolls for 2015 shouldn’t have any issues downloading the Alphalist.

To setup your account for Alphalist and the 2316, please contact our Client Success Team, they would be happy to help!

If you have any questions please let us know by clicking here.


Start 2015 On The Right Foot; BIR Alphalist

bir alphalist 2316As we get closer to the end of the third quarter companies start looking at their plans for 2015. One of the big items they look at is their payroll. Having a single platform for your payroll for a calendar year makes many things easier, but specifically makes the payroll administrator’s life easier when it comes to the AlphaList.

The AlphaList contains all of the names of employees, how much income they have been paid, how much withholding tax has been charged, etc. It is a digital file that is sent to the Bureau of Internal Revenue (BIR) of the Philippines every year. The problem is, if a company has been using multiple payroll platforms throughout the year the job of creating the alphalist becomes very manual and tedious.

If you are looking at making a change to your payroll solution, then now is the time to do it. At PayrollHero, it takes a few of pay cycles to get a new client up and running on our platform. We have a very detailed, deliberate onboarding and training process that ensures success. If you would like to learn more, contact us now and we can run you through how we do things and work to learn more about your company and your needs.

How To Prepare An Alphalist for the Philippines

This is the first guest post of many to come from Kevin Jay B Umali, a CPA in the Philippines.

hirowallpaper2Wondering how to prepare an alphabetical list (alphalist) of employees to comply with regulatory requirements? Thinking that you fell asleep when this was discussed in school? Well, you are one of the many process owners who ask on how to do it. As common as it may seem, the Bureau of Internal Revenue (BIR) has issued certain guidelines and basic information requirements in preparing a company’s alphalist. Such guidelines are released through BIR Revenue Regulations (RR).

The general guidelines are enumerated in Section 2.83.2 of RR 2-98, as amended by RR 10-08. The portions relevant to creating an alphalist are mentioned in Section (B) quoted hereunder, for your reference.

(B) The alphabetical list of employees must show the following:

(1) Name and TIN of employees;
(2) Gross compensation paid by present and previous employers for the calendar year;
(3) (a) Taxable 13th month pay/other benefits for the rank and file employees; (b)

Taxable fringe benefits for managerial employees;

(4) Non-taxable 13th month pay/other benefits (Present employer);
(5) Non-taxable statutory minimum wage;
(6) Non-taxable holiday pay, overtime pay, night shift differential pay and hazard pay
(minimum wage earners only);
(7) (a) For 2008, Amount of Exemptions (January 1 to July 5, 2008) and Amount of

Exemptions (July 6 to December 31, 2008); (b) For 2009 and thereafter, Amount of Exemptions;

(8) Amount of premium payments on health and/or hospitalization insurance not exceeding P2,400.00, if any;
(9) Tax required to be withheld computed in accordance with Sec. 24 (A) of the Code;
(10) Tax withheld by all present employers for the calendar year; and
(11) Adjustment, if any.

(C) The alphabetical list of employees shall be prepared indicating, among others, separate listings of the following:

(1) Employees Separated/Terminated before December 31 of the taxable year (indicate date of separation/termination);
(2) Employees whose compensation income are exempt from withholding tax BUT subject to income tax;
(3) Employees whose total compensation income are exempt from withholding tax and not subject to income tax (indicate if MWE);
(4) Employees as of December 31 of the taxable year with no previous employment within the year;
(5) Employees as of December 31 of the taxable year with previous employment within the year;
(6) Employees who received Fringe Benefits subjected to Fringe Benefit Tax;
(7) Alien employees subject to withholding tax.

Employers with centralized accounting system, or those mandated to consolidate remittances (e.g. large taxpayers), shall prepare alphalists on a regional basis or per branch office, due to the identification of SMW per region where the employee is assigned, which shall be submitted to the BIR where the head office is located.

In cases where no information was provided by a previous employer, such fact shall be stated in BIR Form No. 1604-CF and the present employer shall not be liable to any penalties.”

We hope that you find the foregoing sufficient for your purpose.

If you are knowledgeable on the topic, you are welcome to put in additional comments and suggestions help improve this article.

Please be guided that this post is intended for general information only and not for the purpose of providing legal and/or professional advice. Contact your attorney to obtain advice with respect to any particular issue or problem. The opinions expressed at or through this post are the opinions of the individual author and may not reflect the opinions of any individual attorney. As the author of this post, I am disclaiming any liability from direct or indirect use of this material.


Are you interested in learning more about PayrollHero’s Philippine payroll software? Give us a call anytime to speak with one of our team about how PayrollHero’s payroll platform can help your business go to the next level.